Public Cloud Services to Grow to $131B by 2017

The public cloud services market is forecast to grow 18.5 percent in 2013 to total $131 billion worldwide by 2017. This is an increase from $111 billion in 2012, according to a recent Gartner report. Infrastructure as a service (IaaS),

including cloud computing, cloud based storage and print services, are seen as the fastest-growing segment of the market. They are projected to grow 42.4 percent in 2012 to $6.1 billion and 47.3 percent in 2013 to $9 billion. These are two of the highest growth areas for cloud services today.

Cloud advertising continues to be the largest segment of the cloud services market, comprising 48 percent of the total market in 2012. Gartner predicts that from 2013 through 2016, $677 billion will be spent on cloud services worldwide, $310 billion of which will be spent on cloud advertising.

Gartner defines Cloud advertising as “processes that support the selection, transaction, and delivery of advertising and ad-related data where content and price are determined at the time of end-user access, usually by an auction mechanism that matches bidders with impressions as they become available.” Why is there so much cloud growth in the online advertising space? Just consider the explosive growth of online advertising in general across new platforms like social media and social sharing of content for the answer.

"The continued growth of the cloud services market will result from the adoption of cloud services for production systems and workloads, in addition to the development and testing scenarios that have led as the most prominent use case for public cloud services to date," said Ed Anderson, research director at Gartner. "Evidence of this growth is found in the increasing demand for cloud services from end-user organizations, met by an increased supply of cloud services from suppliers."

North America is the largest region in the cloud services market, accounting for 59 percent of all new spending on cloud services from 2013 through 2016. Western Europe, despite the growth challenges in the region, remains the second-largest region and will account for 24 percent of all new spending during the same time period. However, the highest growth rates for cloud services continue to come from the emerging regions of Emerging Asia/Pacific (led by Indonesia and India), Greater China and Latin America (led by Argentina, Mexico and Brazil).

"IT services providers, particularly those focused on delivering cloud services offerings or related services, must consider these disproportionately large mature markets if they want to play a leading role in cloud services growth worldwide," Mr. Anderson said. "Similarly, markets in Emerging Asia/Pacific, Greater China and Latin America should also be important considerations for IT services providers that want to capitalize on the high growth of these regions, particularly Latin America and Greater China."

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James Finnan has been covering financial markets for 10 years. He has served as Editor in Chief of CFOZone.com since 2010. Additionally he has been a contributing writer to the My Media network of sites including CIOZone.com, myITview.com, and myCIOview.com.